1 2 3 4 TORONTO COMPUTER LEASING INQUIRY 5 6 7 8 ******************** 9 10 11 BEFORE: THE HONOURABLE MADAM JUSTICE DENISE BELLAMY, 12 COMMISSIONER 13 14 15 16 17 Held at: East York Civic Centre 18 850 Coxwell Avenue 19 Toronto, Ontario 20 M4C 5R1 21 22 ******************** 23 24 25 March 27th, 2003

2
  1                        APPEARANCES
  2  Ronald Manes   (np)     )Commission Counsel 
  3  Patrick Moore           )
  4  Daina Groskaufmanis (np)) 
  5  Linda Rothstein  (np)   )City of Toronto 
  6  Lily Harmer    (np)     )
  7  Robert Centa    (np)    )
  8  Gordon Capern           )
  9  David Moore             )MFP 
 10  Fraser Berrill  (np)    ) 
 11  Ken Jones      (np)     ) 
 12  Brian Heller   (np)     )Ball Hsu and Associates Ltd.
 13  Melissa Kronick (np)    )CUPE 
 14  Raj Anand      (np)     )Lana Viinamae
 15  Bay Ryley               )
 16  William Anderson        )Wanda Liczyk
 17  Valerie Dyer   (np)     )Dell Computers
 18  Jennifer Lynch (np)     )
 19  Edward Greenspan (np)   )Jeff Lyons
 20  Todd White (np)         )
 21  Hugh MacKenzie          )Jim Andrew
 22  Bryan McPhadden         )Brendan Power
 23  Glenn Hainey            )Mark Fecenko
 24  Reena Lalji             )
 25  Joyce Ihamaki           )Registrar

1 TABLE OF CONTENTS 2 Page 3 4 List of Exhibits 4 5 6 BRENDAN POWER, Resumed 7 Cross-Examination by Mr. Glenn Hainey 6 8 Continued Cross-Examination 9 by Mr. Gordon Capern 87 10 11 Certificate of Transcript 302 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 EXHIBITS 2 Exhibit No. Description Page No. 3 4 23 VOLUME IV Bound document titled 35 5 "Brendan Power" 6 Additional Tabs 125 and 126 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 --- Upon commencing at 9:01 a.m. 2 3 THE REGISTRAR: The Inquiry is now in session, 4 please be seated. 5 MADAM COMMISSIONER: Good morning. 6 7 BRENDAN POWER; Resumed 8 9 MR. GLENN HAINEY: Good morning, Commissioner, 10 I want to start by first of all thanking you and thanking My 11 Friend, Mr. Capern, for accommodating my schedule, and I 12 apologize if I've created any inconvenience for the 13 Commissioner for any of the other counsel. And I do 14 appreciate your accommodating me. 15 MADAM COMMISSIONER: This is Mr. Fecenko's 16 lawyer, Glenn Hainey. 17 THE WITNESS: Thank you. 18 MADAM COMMISSIONER: And I just want to make 19 sure I'm pronouncing your client's name right, is it Fecenko 20 or Fechenko (sic)? 21 MR. GLENN HAINEY: It's Fecenko, thank you. 22 MADAM COMMISSIONER: Okay, thank you, I have 23 been pronouncing it right, okay, thank you. 24 MR. GLENN HAINEY: Thank you. 25

1 CROSS-EXAMINATION BY MR. GLENN HAINEY: 2 Q: Good morning, Mr. Power. As the 3 Commissioner indicated, I represent, along with Reena Lalji, 4 Mark Fecenko, who will be up there in the same position 5 you're in, in a week or two (2), testifying before this 6 Inquiry. 7 And I wanted to cover a few areas with you, in 8 relation to the dealings you had with -- with Mr. Fecenko in 9 connection with both the MFP matter and the Oracle matter. 10 And I take it that it's fair to say that in 11 1999 and also in the year 2000, you had considerable dealings 12 with -- with Mr. Fecenko; is that fair? 13 A: That's correct, yes. 14 Q: And -- and with other lawyers from the 15 Fasken's law firm? 16 A: That's correct. 17 Q: But your primary contact, as I understand 18 it, was Mr. Fecenko? 19 A: Yes. 20 Q: And he provided you with legal advice with 21 respect to a number of different Y2K IT issues; is that fair? 22 A: That's correct, yes. 23 Q: And you consulted him regularly -- 24 regularly, and I take it that you were satisfied with the 25 service -- legal services he provided to you?

1 A: Yes, I was. 2 Q: In fact, you sought him out, if I 3 understand your previous evidence correctly; is that fair? 4 A: Yes. 5 Q: And in terms of -- of the service he 6 provided to you and the relationship you had with him, I take 7 it that -- I mean you were -- you were a very busy guy in 8 this time period, weren't you? 9 A: Yes. 10 Q: You had a lot going on, you were dealing 11 with a lot of different Y2K issues; is that fair? 12 A: That's correct. 13 Q: And in many cases you were -- you were 14 dealing with issues in a -- in a very tight time frame; fair? 15 A: Everything had a tight time frame, yes. 16 Q: And so, insofar as your dealings with -- 17 with Mr. Fecenko, you often gave him very short time frames 18 within which to work; is that fair? 19 A: That was fair -- fair to ask, yes. 20 Q: Yeah, no, but that's happening, and -- 21 A: Yeah, yeah. 22 Q: -- and he, generally speaking, responded 23 and was -- was timely in getting back to you and giving you 24 the legal advice that you sought from him? 25 A: That's correct --

1 Q: Is that right? 2 A: -- that's correct. 3 Q: And you weren't looking, were you, to Mr. 4 Fecenko to get business advice, were you? 5 A: No. 6 Q: You were looking to him for legal advice? 7 A: That's correct. 8 Q: And you -- is it fair to say, you 9 basically used him as you would have used the City's internal 10 legal counsel? 11 A: Yes, that's correct. 12 13 (BRIEF PAUSE) 14 15 Q: Now, in terms of your dealings with -- 16 with Mr. Fecenko and for that matter with the other lawyers 17 at Fasken's, you were the -- the individual who actually gave 18 them instructions on behalf of the City; is that fair? 19 A: Primarily. It was -- Mr. Batten also 20 worked with him. 21 Q: All right, but just in terms of your 22 dealings with Mr. Fecenko, you -- there was never any 23 question that you were authorized to give him instructions to 24 provide you with legal advice; is that fair? 25 A: That's fair.

1 Q: And those -- that -- the authority that 2 you had to instruct him, came from -- from Ms. Viinamae; is 3 that fair? 4 A: That's correct, yes. 5 Q: And you were, as I understand it, you were 6 the primary contact at the City for Mr. Fecenko and the other 7 Fasken's lawyers? 8 A: That's right. 9 Q: And Mr. -- Mr. Loreto from the City Legal 10 Department was aware of that? 11 A: Yes. 12 Q: He -- he knew you were giving the Fasken's 13 lawyers instructions on an ongoing basis under the terms of 14 the retainer agreement? 15 A: Yes. 16 Q: And -- and Ms. Viinamae was aware of that 17 as well? 18 A: That's correct. 19 Q: Now, is it -- is it fair to say that -- 20 that you, in terms of your dealings with -- with Mr. Fecenko, 21 that you -- you let him know about your IT procurement 22 experience? 23 A: Yes. 24 Q: And, for example, you told him that you 25 had experience working with the most senior IT procurement

1 professionals at the Province of Ontario? 2 A: Yes. 3 Q: And you made it clear to him, I suggest, 4 that -- that you had to deal with a number of multiple IT 5 procurement situations in -- in very short time frames? 6 A: Yes. 7 Q: You told him that. And some vendors you 8 were dealing with were difficult to deal with? 9 A: Yes. 10 Q: And that was something the two (2) of you 11 discussed? 12 A: Yes. 13 Q: And you told him, I gather, as well, that 14 in the course of your dealings with him in IT leasing 15 transactions when you were working for the Province? 16 A: Yes. 17 Q: And that you'd had previous experience 18 when you were with the Province with MFP? 19 A: That's correct. 20 Q: And have I got it right that it wasn't 21 generally your standard practice to involve, either Mr. 22 Fecenko, or forth that matter any of the lawyers at Fasken's 23 in the business case behind any particular transaction? 24 A: That's correct. 25 Q: Because that wasn't the role you expected

1 them to play in connection with these transactions, correct? 2 A: No, we tried to ensure that the business 3 issues had been resolved to everybody's reasonable 4 satisfaction before we gave it to legal. 5 Q: Right. In other words, what you were -- 6 when you took it to the lawyers, you were looking for 7 specific questions about specific legal provisions, is that 8 fair? 9 A: That's fair. 10 11 (BRIEF PAUSE) 12 13 Q: Now, when you first -- I think you told My 14 Friend Mr. Moore, when he examined you the other day that the 15 first contact you had with Mr. Fecenko regarding the MFP 16 transaction was on August the 18th of 1999, correct? 17 A: That's as I recall, yes. 18 Q: And at that point in time, when you first 19 contacted Mr. Fecenko, you had personally been working on 20 this transaction for many months, hadn't you? 21 A: Not for many months -- how do you mean? 22 Going back to the beginning of the RFP part or -- 23 Q: Well, for certainly a number of months? 24 A: Yes. 25 Q: Perhaps many is -- but for a number of

1 months, right? 2 A: Yes. 3 Q: And you'd had ongoing negotiations with 4 MFP regarding the deal before you actually contacted Mr. 5 Fecenko on the 18th of August, correct? 6 A: Correct. 7 Q: And Mr. Fecenko and none of his colleagues 8 at Fasken's were involved in any of those negotiations, 9 correct? 10 A: Not to my knowledge, no. 11 Q: Right. Can I ask you please to look at a 12 document, the Begdoc number is 15675, Commissioner. And Mr. 13 Power, it's in Volume I of your Book of Documents at Tab 90. 14 15 (BRIEF PAUSE) 16 17 Q: Do you have that -- it should be a 18 memorandum -- 19 A: What Tab number? 20 MADAM COMMISSIONER: Tab 90. 21 22 CONTINUED BY MR. GLENN HAINEY: 23 Q: It's Tab 90, Volume I, it's a memorandum 24 from you to Jim Andrew and Lana Viinamae -- 25 A: Okay, yes -- yes --

1 Q: -- dated August 10th, 1999? 2 A: Yes. 3 Q: You see that? 4 A: Yes. 5 Q: All right. I just wanted to refer you to 6 the first paragraph where you report to the two (2) of them 7 the following: 8 "I've reviewed the MFP agreement and there 9 are a few items that need to be negotiated 10 before we do the legal scrubbing." 11 Now, I take -- and then you go on and make 12 reference to certain terms that had to be negotiated. I take 13 it the legal scrubbing was what you had expected that Mr. 14 Fecenko would ultimately do? 15 A: Yes. 16 Q: And that, the legal scrubbing would be 17 looking at the actual documents you've negotiated and giving 18 you legal advice on the legal terms and conditions of those 19 documents, correct? 20 A: Correct. 21 22 (BRIEF PAUSE) 23 24 Q: Now, I wanted to just review with you now, 25 Mr. Power, if I could a few of the answers that you gave the

1 other day on March the 24th, when Inquiry Counsel, Mr. Moore, 2 was asking you some questions and I just wanted to get a 3 clarification of a couple of the answers you gave to him. 4 And I've actually -- Ms. Lalji has put a copy 5 of the transcript -- I guess we'll give you the copy of the 6 transcript and I wanted to start on -- with the transcript on 7 Monday, March 24th. 8 And, in particular, starting at page 152 of 9 the transcript. And I gather Commissioner that you have the 10 transcript -- 11 MADAM COMMISSIONER: I'm right here. 12 MR. GLENN HAINEY: You're ahead of me. 13 MADAM COMMISSIONER: Just tell me what line 14 you're on and -- 15 MR. GLENN HAINEY: I will do that -- 16 MADAM COMMISSIONER: I can do -- 17 MR. GLENN HAINEY: -- because I -- 18 MADAM COMMISSIONER: I can do my -- 19 MR. GLENN HAINEY: I just want to make sure 20 Mr. Power is with me, too. 21 22 CONTINUED BY MR. GLENN HAINEY: 23 Q: I'm looking at Page 152 and I'm looking 24 starting at Line 23 which is right near the bottom -- right 25 at the bottom of the page, Mr. Power and --

1 MADAM COMMISSIONER: The last question. 2 MR. GLENN HAINEY: The last question on the 3 page. 4 THE WITNESS: Okay. 5 6 CONTINUED BY MR. GLENN HAINEY: 7 Q: Okay. So Mr. -- and I'm not going to ask 8 you the same questions over again but in that -- I'll just -- 9 I just wanted you to have it handy so you can see what was 10 recorded in the transcript. 11 So the question was: 12 "Q: All right. You -- and can you tell us 13 what you told Mr. Fecenko in the voice mail 14 message that this e-mail says you left with 15 him." 16 So and just to stop there. As I understand 17 it, this -- your -- your involvement of Mr. Fecenko -- 18 getting him involved begins with a voice mail message from 19 you, correct? 20 A: Yes. 21 Q: And you -- your answer is: 22 "A: I don't recall exactly but I would 23 suspect I was asking him to give us an 24 analysis of the documents and advise us on 25 what the issues were."

1 And I take it, Mr. Power, that in terms of 2 what -- whatever the voice mail message was that you left, 3 you don't have any specific recola -- recollection of what 4 you said? 5 A: No, I don't. 6 Q: Is that fair? 7 A: That's fair. 8 Q: All right. In other words, when you say I 9 suspect, I mean, that's speculation. You're not sure what 10 you said? Is that fair? 11 A: Yes. 12 Q: Okay. You don't have any notes, I take 13 it, of any of the conversa -- of what you said in the voice 14 mail message? 15 A: No. 16 Q: So if Mr. Fecenko recalls any specifics of 17 that voice mail message, you're not really in a position to 18 disagree with whatever he might recall? 19 MADAM COMMISSIONER: I guess it would depend, 20 Mr. Hainey. 21 THE WITNESS: It would, yes. 22 MADAM COMMISSIONER: If he says -- if Mr. 23 Fecenko says, he told me that he just bought a bright new 24 pink Cadillac. 25 MR. GLENN HAINEY: Fair.

1 MADAM COMMISSIONER: He must -- 2 MR. GLENN HAINEY: No, that's fair. I accept 3 that. 4 5 CONTINUED BY MR. GLENN HAINEY: 6 Q: But anyway, you don't have a specific 7 recollection of what you said? 8 A: No, I don't. 9 Q: Okay. Now, if you could look then at the 10 next page reference at 160 of the transcript, please and 160 11 starting at Line 18, again at the bottom of the page and Mr. 12 Moore is asking you about events on August the 18th and the 13 very end of the question he says: 14 "Sorry, on the 18 --" 15 D -- are you there yet? I don't want to -- 16 MADAM COMMISSIONER: Page 160? The numbers 17 are up at the top right hand corner. 18 THE WITNESS: Oh, Page 160. 19 20 (BRIEF PAUSE) 21 22 THE WITNESS: This doesn't go this far. 23 MADAM COMMISSIONER: Are you on the same date, 24 March 24? 25 THE WITNESS: I'm on Page 78 of 90. Page 90

1 of 90. 2 MADAM COMMISSIONER: Maybe is it in another 3 batch right there? 4 THE WITNESS: This one is dated March the 5 26th. 6 MR. GLENN HAINEY: You know what, I think 7 maybe what's happened is we've moved to -- is it -- does it 8 go to the next day then? 9 MR. WILLIAM ANDERSON: I think his numbering 10 is probably different than yours, Madam Commissioner. When 11 you print it off of the internet, at the top right hand 12 corner you get page whatever of 90 and then you have to look 13 -- 14 MR. GLENN HAINEY: Can Ms. Lalji go up and 15 help him, Commissioner? Thanks. 16 17 (BRIEF PAUSE) 18 19 MR. GLENN HAINEY: I think there's two (2) 20 page numbers on these documents. That's what -- 21 THE WITNESS: Okay. 22 MS. REENA LALJI: 160, Mr. Hainey? 23 MR. GLENN HAINEY: Yes. 24 MADAM COMMISSIONER: 160. 25 THE WITNESS: Okay.

1 MADAM COMMISSIONER: At about line -- 2 MR. GLENN HAINEY: Line -- 3 MADAM COMMISSIONER: Line 16, say. 4 MR. GLENN HAINEY: 18. 5 MADAM COMMISSIONER: I know you said 18 but 6 you can't -- he won't -- he won't be able to know what -- 7 MR. GLENN HAINEY: Yeah. No, you're right. 8 It should be the start at Line 16. 9 THE WITNESS: Thank you. 10 MADAM COMMISSIONER: Okay. 11 12 CONTINUED BY MR. GLENN HAINEY: 13 Q: And you'll see there that your asked: 14 "And in the interval between the 15 communications we've just looked at on the 16 -- on the 19th and -- sorry, on the 18th, I 17 should say, had you and Mr. Fecenko had 18 any telephone conversations?" 19 So, this would be, you leave the voice mail, 20 you e-mail him the documents, and then what Mr. Moore was 21 asking you did you have any discussion -- telephone 22 discussion with him on the 18th? 23 And your answer, as recorded there is: 24 "I cant say for sure, but I think we did." 25 And I just wanted to explore with you. Do you

1 have any recollection -- I take it you cant say one way or 2 the other whether you had a telephone discussion with him on 3 the 18th, after you'd sent him the documents? 4 A: That's correct. 5 Q: But I take it, if he were to say you did, 6 that would accord with what you think happened? 7 A: Yes. 8 Q: But you can't recall any specifics of that 9 discussion, is that fair? 10 A: That's fair. 11 Q: And then if we go on to the next question, 12 Mr. Moore asks you about the document at Tab 26, which refers 13 -- which is -- which is an e-mail from Mr. Fecenko, which he 14 says: 15 "I'll give you a call around 9:30 a.m. this 16 morning to answer any questions you may 17 have." 18 So, this is now the next day, this is the 19 19th. And I take it, he asked you if you had any 20 recollection of that, and you said: 21 "I don't have a recollection of it, no." 22 And I take it that -- so, you don't have a 23 recollection of any call on the 18th? 24 A: That's correct. 25 Q: You think one may have occurred, but you

1 don't recall any details of the discussion? 2 A: That's right. 3 Q: Okay. And you do recall that there was a 4 discussion on the telephone on the 19th, but you don't recall 5 any details, is that fair? 6 A: That's fair. 7 Q: And you don't, for example, can you say 8 how long it was, do you have any recollection of whether it 9 was lengthy, short? 10 A: No, I don't. 11 Q: Okay. And you don't have any recollection 12 of the subject matter of -- when you know what generally you 13 were discussing, presumably, you're discussing the documents, 14 is that fair -- 15 A: That's -- 16 Q: -- the transaction? 17 A: Right. 18 Q: But you don't have any specific 19 recollection of what Mr. Fecenko said to you or what you said 20 to him, is that right? 21 A: That's right. 22 Q: And then when he -- when you are -- he 23 goes -- Mr. Moore went on and says: 24 "Do you remember whether Mr. Fecenko asked 25 you for documents additional to those two

1 (2) that you'd sent him." 2 Because you only sent him the -- the two (2) 3 documents that you looked at with Mr. Moore, correct? 4 A: That's my recollection, yes. 5 Q: Right. And you -- you answered, at Line 6 9, this is now Page 161, of the transcript. Have you got 7 that in front of you? 8 A: Yes. 9 Q: And your answer was, 10 "I don't know if he did. If he did, he 11 would have received them." 12 So, you don't know whether he asked you or 13 not, but your conclusion is that had he asked me, I would 14 have sent them? 15 A: Yes. 16 Q: Is that fair? But you don't know whether 17 he asked you or not, that was a true statement, correct? 18 A: Right. 19 Q: And your conclusion is based on your 20 belief that if someone asked you for something, someone like 21 Mr. Fecenko asked for something, it was your practice to give 22 it to them, is that fair? 23 A: That was the -- typically the relationship 24 we had, yes. 25 Q: Right. And that's why you say, that I

1 must -- he mustn't have asked me because if he had have, I 2 would have given it to him, fair? 3 A: Fair. 4 Q: But you don't remember one way or the 5 other, do you? 6 A: Right. 7 Q: And am I -- I am correct, am I not, that 8 there was, at this point in time when you're dealing with Mr. 9 Fecenko on the 18th and 19th of August, there is an urgency 10 to getting this done, correct; because you've got people 11 leaving for holidays? 12 A: Yes, that's correct. 13 Q: You gotta get it done very, very, quickly, 14 right? 15 A: Right. 16 Q: You want to get this legal scrubbing done 17 very quickly? 18 A: Yes. 19 Q: And you -- and you want -- the legal 20 scrubbing that you're looking for is simply to have the 21 lawyers look at the legal terms and conditions in the 22 agreement that you've negotiated, correct? 23 A: Yes. 24 Q: You're not asking them -- you weren't 25 asking Mr. Fecenko, at this point in time, on the 18th or

1 19th of August, to give you any opinion as to whether it was 2 a good business deal or not, correct? 3 A: That's correct. 4 Q: And in fact, you'll agree with me, he 5 couldn't have because you didn't give him -- because you 6 weren't looking for that opinion, you didn't give him the 7 details of the business transaction, did you? 8 A: I don't recall that I did -- 9 Q: All right. I think that -- but you -- the 10 -- the documents would suggest you did, you'll agree with me, 11 I think Mr. Moore took you through this; right? 12 A: Yes. 13 Q: Okay. 14 15 (BRIEF PAUSE) 16 17 Q: And then if you could -- could look at 18 page 163, please, of the transcript. This will be the last 19 reference I'll take you to at this stage. A 163, line -- 20 well, the question starts at line 6, when Mr. Moore says: 21 "Tab 1, sir." 22 So I make sure you're there, it's Tab -- line 23 6, it's page 163 of the transcript, have you got that? 24 A: Yeah, I've got that. 25 Q: Okay. He's asking you about the document

1 at Tab 1, which is the August 19th memorandum from Mr. 2 Fecenko, and he quotes from the opening sentence. And then 3 he asks you at line 16: 4 "But before we look at those, let me ask 5 you, do you remember the particulars of the 6 discussion that this memorandum says you 7 had earlier in the day with Mr. Fecenko? 8 A: No, I don't." 9 So, again, another discussion that you don't 10 have any specific recollection of what you talked about; 11 fair? 12 A: Fair. 13 Q: Now, I want to just move briefly to -- and 14 I apologize for jumping from one (1) transaction to another, 15 but I want to just have you look briefly at some of the 16 communications you had with Mr. Fecenko, in relation to the 17 Oracle transaction, and I'm going to come back to the MFP 18 transaction, but I want to ask you about a few of the 19 exchanges with Mr. Fecenko. 20 So, as I understand it, you first involved Mr. 21 Fecenko in the Oracle transaction on December 14th; is that 22 right? 23 A: That would be the approximate date, yeah. 24 Q: Okay. And again, you're in a situation 25 where you're bringing him in when you are from a time point

1 of view, under the gun; right? 2 A: Yes. 3 Q: There's a huge urgency to getting this 4 thing done by the year end; correct? 5 A: Yes. 6 7 (BRIEF PAUSE) 8 9 Q: And I'm sorry, I am going to have to have 10 you look at one other transcript reference, and that's at 11 page -- this is now the next day, this is March 25th, so it 12 will be the other document you've got before you. 13 March the 25th, and it's page -- beginning at 14 page 79 of the transcript, starting -- the question actually 15 starts on page 78, at the very bottom of line 25, and 16 continues over the page. 17 I want to ask you about the portion on -- at 18 line 8, but -- so you're being asked by Mr. Moore about the 19 communication you get from Mr. Griffith from Oracle -- 20 A: Yes. 21 Q: -- and on December the 14th at 8:50 in the 22 morning, you e-mailed Mr. Fecenko and you said: 23 "Mark, could I please have a review of the 24 attached documents with a very quick 25 turnaround, say twenty-four (24) hours."

1 Do you remember sending that e-mail to him? 2 A: Yes. 3 Q: And you were asked then, starting at line 4 8, by My Friend, Mr. Moore: 5 "Now, at that point was this communication 6 preceded by any other communication to Mr. 7 Fecenko, such as a letter or voice mail or 8 a telephone call? 9 There may have been, I don't recall." 10 And I take it that if there was any discussion 11 with Mr. Fecenko at this point in time, you just have no 12 recollection, first of all, whether it happened at all; 13 right? 14 A: Right. 15 Q: Or -- and if it did happen, what you 16 discussed; right? 17 A: Correct. 18 Q: Okay, and then could you then turn to page 19 81 of the transcript, please. 20 21 (BRIEF PAUSE) 22 23 Q: And here starting at line 7, do you have 24 that? 25 A: Yes.

1 Q: You were asked: 2 "Right and doesn't [I guess it should be] 3 it doesn't appear that you've had any in 4 depth conversation with them for the 5 purpose of describing for him the process 6 which led you and the City to this point of 7 negotiations with Oracle, correct?" 8 A: Yes. 9 Q: So you agree that you didn't -- you hadn't 10 had any discussion with them at that -- at that point? 11 A: Not as I recall, no. 12 Q: You were working on a very tight time 13 frame, you weren't looking for his business advice on this 14 deal either, were you? 15 A: That's correct. 16 Q: And you were trying to get his advice on 17 the legal terms and conditions as quickly as you could, 18 correct? 19 A: Yes. 20 Q: And so you were going to -- you decided to 21 give him what you felt he needed to see for the purpose of 22 giving you that advice, is that fair? 23 A: Yes. 24 Q: And to give you that advice within the 25 time frame you wanted it?

1 A: Yes. 2 Q: Is that right? And then you were asked, 3 well, when you got -- we'll look at the communication in a 4 moment -- he then -- he e-mailed you back and asked for in 5 information about the deal. Do you recall that? 6 A: Yes -- yes I do. 7 Q: And then you said, you were asked at line 8 12: 9 "So when you got this communication from 10 Mr. Fecenko, what did you do about it?" 11 The answer: 12 "Well I believe I answered his questions as 13 best I could." 14 Now, what's the basis for that belief, that 15 you answered his questions? Was that in a -- I take it it 16 wasn't a written communication, because we haven't seen any? 17 Do you have any recollection of actually doing 18 that or is that just again based on your belief that that's 19 what you would have done? 20 A: I can't recall now, what that 21 communication was about -- 22 Q: All right. Let's look at it -- let's look 23 at it. 24 25 (BRIEF PAUSE)

1 Q: I think if you look at Volume IV of your 2 documents, Tab 114, which is -- and the Begdoc number, 3 Commissioner, is 11260. 4 MADAM COMMISSIONER: Thank you. 5 6 (BRIEF PAUSE) 7 8 CONTINUED BY MR. GLENN HAINEY: 9 Q: Do you have that document? 10 A: Yes, I do. 11 Q: Okay, you can see that that's -- that a 12 document, an e-mail sent to you from -- now it's Gloria Rowe, 13 who was Mr. Fecenko's assistant, correct? 14 A: Yes, I knew that. 15 Q: And he says: 16 "I've had a lot of dealings with Oracle in 17 the last year. I haven't looked at your 18 documents yet --" 19 Because you'd just sent him the documents, 20 right? 21 A: Right. 22 Q: Are we -- and then he asks you a number of 23 questions: 24 "Are we getting any software development 25 work done, or are we limiting ourselves to

1 Oracle eight (8) network licenses and 2 related maintenance and support." 3 And I won't read the whole document. But, he 4 asks you a number of questions, correct? 5 A: Yes. 6 Q: And I take it that you don't have any 7 recollection of actually answering his questions? You assume 8 you must have -- 9 A: I -- 10 Q: -- because that was your practice -- 11 A: -- yes -- 12 Q: -- but, you don't recall? 13 A: I don't recall, no. 14 Q: Is it -- would you agree with me that it's 15 possible you didn't reply to his questions because of the 16 time constraints you were under, is that a possibility? 17 A: It doesn't sound reasonable to me that I 18 wouldn't answer him. 19 Q: All right. Could you take a look then 20 back to Volume I of your document book to Tab 11 and it's Doc 21 -- Begdoc 5457. 22 23 (BRIEF PAUSE) 24 25 Q: Do you have that?

1 A: Yes, I do. 2 Q: Okay. That -- and that's the -- that's 3 the memorandum that Mr. Fecenko sent to you and copied to Mr. 4 Loreto with his comments on the draft agreements that you 5 provided to him. Is that fair? 6 A: Yes. 7 Q: And then you took that memorandum and you 8 used it, I take it, for the purpose of negotiating the terms 9 of the agreement with Oracle? 10 A: Yes. 11 Q: And the object of the exercise was for you 12 to ad -- endeavour to get Oracle to agree to the various 13 opposed changes that Mr. Fecenko was giving you advice on? 14 A: Yes. 15 Q: All right and then -- and in fact, that -- 16 you succeeded in part because the documentation was, as a 17 result of your negotiations, revised by Oracle, correct? 18 A: Yes. 19 Q: And -- and I'm correct, am I, you didn't 20 involve Mr. Fecenko in any of those negotiations. You merely 21 used this memo as your, sort of, aid memoir. Is that fair? 22 A: That's fair. 23 Q: All right and then you s -- you got a 24 revised agreement back from Oracle, right? 25 A: Yes.

1 Q: And you sent that revised agreement to Mr. 2 Fecenko on December 22nd and the document that I am referring 3 to -- the Begdoc number, Commissioner, is 38996. We 4 circulated copies. This is not in the document book. 5 MADAM COMMISSIONER: Okay. All right. 6 MR. GLENN HAINEY: And he has a copy of it. 7 MADAM COMMISSIONER: Can -- 8 9 (BRIEF PAUSE) 10 11 MADAM COMMISSIONER: Just a couple things with 12 respect to these documents, then. Can we make sure that at 13 the break they're added to the last -- is there any room in 14 Volume IV to add any more documents? 15 MR. GORDON CAPERN: There's more room in 16 Volume IV than in Volume III, Commissioner. 17 MADAM COMMISSIONER: Okay. 18 MR. GORDON CAPERN: So that would be a good 19 place to put them. 20 MADAM COMMISSIONER: All right. So we'll add 21 these afterwards to Volume IV and Mr. -- Mr. Hainey, which of 22 these documents will you be referring to first? You've given 23 me two (2) documents. 24 MR. GLENN HAINEY: Oh, I'm sorry. I'm going 25 to be referring to the one I just mentioned, which is the Dec

1 -- the 38996, first. 2 MADAM COMMISSIONER: I don't have any numbers. 3 MR. GLENN HAINEY: Oh, I'm sorry. Okay. So 4 December 22nd on the City of Toronto letterhead document that 5 I'll -- that I'm about to ask him about. 6 MADAM COMMISSIONER: Okay. 7 MR. GLENN HAINEY: And then the other document 8 -- 9 MADAM COMMISSIONER: All right. So just -- I 10 just need a prior process -- 11 MR. GLENN HAINEY: Sure. 12 MADAM COMMISSIONER: -- because normally we 13 would have put these all in the binders. So the first one, 14 the December 22nd, has a Begdoc number of 38996? 15 MR. GLENN HAINEY: Correct. 16 MADAM COMMISSIONER: And then the other 17 document from Gloria Rowe, does that have a Begdoc number, do 18 you know? 19 MR. GLENN HAINEY: No, but -- well, sorry. 20 You mean the one I'd already -- just ref -- 21 MADAM COMMISSIONER: I -- I'm just -- 22 MR. GLENN HAINEY: Oh, yeah. Sure. I'm 23 sorry. 24 MADAM COMMISSIONER: You've given me -- 25 MR. GLENN HAINEY: I -- I -- it -- yes, it

1 does. It's 16239. Sorry. 2 MADAM COMMISSIONER: 16239. Okay. So the one 3 numbered 38996 will be the next tab under Tab 4 -- under 4 Volume IV and the one numbered 16239 will be the tab after 5 that. I just don't know what those are. 6 THE REGISTRAR: Tabs 125 and 126. 7 MADAM COMMISSIONER: Okay. Tab 125 and Tab 8 126. 9 THE REGISTRAR: In Volume IV. 10 MR. GLENN HAINEY: Thank you. 11 MADAM COMMISSIONER: Great, thank you. Now, 12 Mr. Hainey? 13 MR. GLENN HAINEY: Yes? 14 MADAM COMMISSIONER: Has Mr. Power seen these 15 documents before just this second? 16 MR. GLENN HAINEY: I don't know. 17 MR. BRYAN MCPHADDEN: They were handed out 18 about thirty (30) seconds before you arrived this morning. 19 MADAM COMMISSIONER: Okay. 20 MR. GLENN HAINEY: We didn't -- to be honest 21 with you, we -- we thought they were in the -- we discovered 22 this morning when we got here we checked and we realized they 23 weren't in the material. 24 MADAM COMMISSIONER: That's fine. I would 25 just like to make sure that Mr. Power has an opportunity --

1 MR. GLENN HAINEY: Absolutely. 2 MADAM COMMISSIONER: -- to read them. So, I 3 don't know if you're just taking him to one (1) line, for 4 example, or -- 5 MR. GLENN HAINEY: Actually I am, I'm not 6 sure -- 7 MADAM COMMISSIONER: Okay. Well, let's see, 8 Mr. Power, let's see what the question is and if you need any 9 time to read, as I've told you all along, you just let me 10 know; all right? 11 THE WITNESS: Thank you. 12 MADAM COMMISSIONER: Okay. 13 14 CONTINUED BY MR. GLENN HAINEY: 15 Q: And by all means, just stop me if I'm 16 going to far. 17 I just wanted to confirm, looking at this 18 December 22nd document, this is -- I take it that what this 19 is, you -- you received, if you look at the second page, your 20 -- you get a fax from Larry Griffith at Oracle, in which he 21 says: 22 "Attached is the Oracle master software 23 license and services agreement, Addendum 1, 24 which addresses as many of your lawyer's 25 issues as possible."

1 So, that's -- that's Griffith getting back to 2 you in response to your having negotiated with him on the 3 Fecenko memorandum; right? 4 A: Right. 5 Q: And then you then turn around and fax that 6 to Fecenko? 7 A: Yes. 8 Q: So that he can comment on it; is that 9 right? 10 A: Yes. 11 Q: Okay. And are you -- can you explain why 12 in -- on the second page in the fax from Mr. Griffith, there 13 are in the first paragraph, all those -- one (1), two (2), 14 three (3), four (4), five (5), six (6) lines that are crossed 15 out? 16 A: No, I can't. 17 Q: Do you recall whether he sent you that 18 additional Exhibit A and Addendum A and the material that's 19 crossed out there, or -- or not? Or do you have any 20 recollection about what -- why that's crossed out? 21 22 (BRIEF PAUSE) 23 24 A: No, I can't honestly -- 25 Q: Okay.

1 A: -- they realized they weren't complete. 2 Q: Certainly if we look at -- at the 3 document, certainly that -- that the material that's been 4 struck out is not included in the package; right? That's 5 sent to Fecenko? 6 A: It doesn't appear to be, if I can... 7 8 (BRIEF PAUSE) 9 10 MR. PATRICK MOORE: If it assists, 11 Commissioner, there is an addendum at Page 10, if you look at 12 the header line at the very top, but it's not clear whether 13 that's Addendum 1 or Addendum A. It just says Addendum. 14 MADAM COMMISSIONER: It's -- the next line 15 says Addendum number 1, to the master software license. 16 17 (BRIEF PAUSE) 18 19 MADAM COMMISSIONER: Are you in a position to 20 help us, Mr. Hainey? 21 MR. GLENN HAINEY: I -- I'm not. 22 MADAM COMMISSIONER: Okay. 23 MR. GLENN HAINEY: I -- that's one (1) of the 24 reasons why I'm asking, because I -- I take it, Mr. Power, 25 let me put it to you this way.

1 CONTINUED BY MR. GLENN HAINEY: 2 Q: From my review of this document, it looks 3 to me as if the only documents that are attached are the 4 Oracle Master Software Licenses and Services Agreement, and 5 Addendum 1. And the rest of the documentation referenced in 6 the -- in the first paragraph that's been struck out, is not 7 attached; is that -- are you and I in agreement on that? 8 A: That appears to be the case, yes. 9 Q: Okay, and -- and you can't explain that, I 10 take it? 11 A: Other than it doesn't look -- like things 12 like order forms and -- I can't read it very well. The 13 licenses we're getting credits for, I'm not sure. I'm not 14 sure whether they struck that out or we struck it out, I 15 don't know. 16 Q: Okay, fair enough. Let me then move on. 17 In any event, you'll agree with me, that you -- it appears 18 that on December 22nd, you send the revised Oracle agreement 19 to Mr. Fecenko? 20 A: Yes. 21 Q: And then let me ask you to look at the 22 next document and this document, Commissioner, the Begdoc 23 number is 5452. 24 And we're not -- we can't find this document 25 in the document books. And it's a memorandum from Mr.

1 Fecenko to Mr. Power dated December 22nd, '99, relating to 2 the Oracle agreement. 3 MS. REENA LALJI: Sorry, Commissioner. 4 MADAM COMMISSIONER: Yes? 5 MS. REENA LALJI: If I could just interrupt 6 for a minute. I thought I had seen it and for some reason I 7 thought it was in Volume I of Mr. Power's documents. 8 I don't know if anyone can help us out on 9 that, but it is a memorandum that went to Mr. Power. 10 MR. GORDON CAPERN: 5252 is not in any of the 11 document books, Commissioner, at the moment. 12 MS. REENA LALJI: It may have a different 13 Begdoc number. I've noted that some of the documents are -- 14 MADAM COMMISSIONER: Sometimes there's more 15 than one (1) document of the same thing. 16 MS. REENA LALJI: That's correct. 17 MR. GORDON CAPERN: I'll try to find it 18 quickly, Commissioner. 19 MR. GLENN HAINEY: I can proceed without 20 putting the document -- 21 MADAM COMMISSIONER: Okay. 22 MR. GLENN HAINEY: -- to Mr. Power. 23 24 CONTINUED BY MR. GLENN HAINEY: 25 Q: Do you recall, Mr. Power, that after you

1 sent the revised agreement to Mr. Fecenko that he actually 2 got back to you and gave you further comments about the 3 revised agreement and the two (2) of you discussed it. Do you 4 remember that? 5 A: I don't recall, but I would suspect it 6 happened, yes. 7 Q: Okay. But, you don't -- so you would 8 suspect that that's what would happen and, in fact, when we 9 get the document, I think you'll see that that suggests it 10 did happen. 11 But -- and that wouldn't be a surprise to you, 12 that's what you expect would have happened? 13 A: Yes. 14 Q: But, you don't remember it? 15 A: I don't. 16 Q: And is it fair to say, when you're -- I 17 don't want to sound for a moment that I'm being critical of 18 you for not remembering these discussions. Your discussions 19 with Mr. Fecenko would be a very, very small part of all the 20 work you were doing on this project, correct? 21 A: That's correct. 22 Q: I mean you were you having literally 23 thousands of discussions with different people about these 24 different transaction, day in and day out, and your 25 discussions with Mr. Fecenko would be a very, very small part

1 of all of that, fair? 2 A: Fair. 3 Q: So, that when you say you can't recall 4 these discussions, you assume they happened, one (1) of the 5 reasons for that would be, they were just relatively a very, 6 very small piece of this big puzzle you were working on, 7 fair? 8 A: Fair. 9 Q: Now, as I understand the events on the 10 Oracle transaction the final agreement actually was signed 11 and executed by the City on December 31st, is that right? 12 A: Yes. 13 14 (BRIEF PAUSE) 15 16 Q: And I take it that the -- that that 17 agreement, I think you agreed with, if I've got your evidence 18 correctly, that final agreement was never provided to Mr. 19 Fecenko for his review, was it? 20 A: Not that I'm aware. 21 Q: It's not, not that you're aware, it 22 wasn't, was it? I mean, it just wasn't given, you just 23 didn't give it to him to review, did you? 24 A: No, I don't think I did, no. 25 Q: No. And you had sought his advice, you'd

1 got some advice, but ultimately and it's fair to say, 2 ultimately, because you had to get it signed by December 3 31st, you proceeded to get it signed without having him look 4 at the final document? 5 A: Right. 6 Q: That would be the reason, right? 7 A: Yes. 8 Q: Urgency, time pressures, you couldn't 9 basically take any -- you didn't have any time to get the 10 lawyers input on the final document, correct? 11 A: That's correct. 12 Q: Can I ask you to look at Volume IV of your 13 -- of your documents -- document books, and in particular, 14 Tab 77. 15 16 (BRIEF PAUSE) 17 18 Q: And it's Begdoc number, Commissioner, is 19 16179. 20 21 (BRIEF PAUSE) 22 23 Q: Do you got that in front of you? 24 A: Yes, I do. 25 Q: So this is -- this is Mr. Fecenko getting

1 back to you on January the 4th in response to the amendments 2 that had been agreed to by Oracle to the agreement, correct? 3 A: Yes. 4 Q: And he's telling you that the changes in 5 the price protection are unhelpful and I've jumped a document 6 and I apologize because I should have had you look at the new 7 document 16239. 8 MADAM COMMISSIONER: This is the one that 9 would be at Tab 126 of Volume IV. 10 MR. GLENN HAINEY: Correct. 11 THE WITNESS: Sorry, where is this document? 12 MR. GLENN HAINEY: Now, this is a new document 13 that is -- that Ms. Lalji, I think, should be there 14 separately, Mr. Power. 15 MADAM COMMISSIONER: It's that one you have 16 right on top. 17 MR. GLENN HAINEY: Yeah. 18 19 CONTINUED BY MR. GLENN HAINEY: 20 Q: And this is -- this is one I don't think 21 you've seen so take however long you need to look at it. I 22 just really want to ask you about whether you ac -- whether 23 this a document you did send to Mr. Fecenko. 24 25 (BRIEF PAUSE)

1 Q: Do you see that? 2 A: Yes. 3 Q: And, Commissioner, I should point out to 4 you as Mr. Capern has suggested I should. Apparently -- this 5 document comes from Mr. Fecenko's file. Apparently the 6 Begdoc -- Begdoc numbered document 16239 is only the covering 7 e-mail. It doesn't include the attachment which is the 8 Oracle -- the draft agreement. 9 MADAM COMMISSIONER: Okay. 10 MR. GLENN HAINEY: So it may be that -- I 11 don't know whether it needs another Begdoc number but -- 12 MADAM COMMISSIONER: No, it's okay. I -- wh - 13 - we'll look after that part, then but what ha -- what 14 happens, I suspect, is that the top page is something that we 15 might have got from Mr. Powers' computer through the KPMG 16 investigation and the attachments might not have been on that 17 e-mail. Is that right, Mr. Capern? 18 MR. GORDON CAPERN: That's exactly right, 19 Commissioner. The only difference between the documents is 20 that the copy that Mr. Hainey is now working with has 21 obviously been generated internally at Fasken's. 22 MADAM COMMISSIONER: Right. 23 MR. GORDON CAPERN: The copy we have on the 24 system was -- has the Brendan Power header on it -- 25 MADAM COMMISSIONER: Right.

1 MR. GORDON CAPERN: -- which means it was 2 produced internally. 3 MADAM COMMISSIONER: Okay. So we'll -- Mr. 4 Moore will look after getting Begdoc numbers for the rest. 5 MR. GLENN HAINEY: Great. Thank you. 6 MADAM COMMISSIONER: But in the meantime, this 7 seems to suggest that Mr. Power did, in fact, I should say, 8 just sent the price protection clauses to Mr. Fecenko before 9 December 31st. 10 MR. GLENN HAINEY: Right. Right. 11 MADAM COMMISSIONER: I thought your -- I 12 thought your earlier question was that he hadn't sent him 13 anything before December 31st? 14 MR. GLENN HAINEY: I thought I asked him 15 whether he'd had his review -- whether he had his comments 16 back and whether the document that ultimately was signed -- 17 MADAM COMMISSIONER: I see. Okay. 18 MR. GLENN HAINEY: -- had been reviewed by Mr. 19 Fecenko which I think the evidence will establish was not the 20 case but I'll ask -- 21 MADAM COMMISSIONER: I think the question you 22 put to him is that you sought his advise but ultimately 23 because you had to get it signed by December 31st, you 24 proceeded to get it signed without getting him to look at the 25 final document.

1 MR. GLENN HAINEY: Right. 2 MADAM COMMISSIONER: Is this the final 3 document? 4 MR. GLENN HAINEY: No. 5 MADAM COMMISSIONER: Okay. That's fine. 6 Okay. 7 8 CONTINUED BY MR. GLENN HAINEY: 9 Q: So just looking at this -- at this e-mail 10 now, you are -- you send this to Mr. Fecenko December the 11 30th, 4:30 p.m., and you're asking him to review the price 12 protection clauses; correct? 13 A: Yes. 14 Q: And the -- replacing the mandatory 15 clauses, and if you look at the attachment, I mean this is -- 16 this is not the -- the document that ultimately gets signed, 17 it's not filled in, it's just the -- it's the blank standard 18 form document, it doesn't have all the terms of the -- of the 19 deal in it; does it? 20 A: No. 21 Q: So, just so that we're -- so that -- just 22 following on the Commissioner's question, this was not the 23 final agreement that was signed on December 31st, was it? 24 A: No, it was not. 25 Q: All right, well then if I could then ask

1 you to turn to the document I had been asked -- looking at 2 with you, Tab 77, Volume IV, Begdoc 16179, which would appear 3 to be Mr. Fecenko's response to this -- to your December 30th 4 e-mail to him. 5 Do you agree with me that that's what -- that 6 that's Fecenko's response to your e-mail? 7 A: Yes. 8 Q: He starts off with -- because you've been 9 asking him about the price protection clause. He says: 10 "The changes to price protection are 11 unhelpful." 12 And goes on to give you some further comments 13 on the document; correct? 14 A: Yes. 15 Q: And he -- and he then says, if you drop 16 down to the -- about the fifth paragraph, where he says: 17 "I've not seen any reference to ten 18 thousand (10,000). Note that I have not 19 seen the pricing schedule or a filled in 20 network order form. I would be happy to 21 look at both." 22 Do you remember getting this e-mail from him? 23 A: Yes. 24 Q: Right. Do you remember when you -- 25 getting the e-mail from him, I presume at this stage, the

1 deal's already been signed? 2 A: Yes. 3 Q: So, and -- and he's offering to look at 4 the -- the document -- the filled in document, which he'd 5 never seen, but I take it that at that point you don't give 6 it to him because it's already been signed? 7 A: Yes. 8 Q: Without the benefit of any advice from 9 him? 10 A: Correct. 11 Q: And that would not be, I take it, in 12 accord with your -- with your normal reasonable procedure; is 13 that fair? 14 A: That's fair. 15 MADAM COMMISSIONER: I'm not sure what you 16 mean by not being in accord with his normal reasonable 17 procedure. Do you mean that normally and reasonably he 18 would, after something is signed, send something to him, or 19 that normally he would wait until he had something back 20 before he did anything further with it? 21 MR. GLENN HAINEY: Yeah, that's a good -- 22 MADAM COMMISSIONER: The answer's no, but -- 23 MR. GLENN HAINEY: Let me -- let me -- 24 MADAM COMMISSIONER: I think in fairness -- 25 MR. GLENN HAINEY: -- try it again. I think

1 -- no, in fairness, I think -- I think you're quite right. 2 3 CONTINUED BY MR. GLENN HAINEY: 4 Q: I take it that when -- that what was not 5 in accord with your normal procedure was to -- was to seek 6 the advice of Mr. Fecenko and essentially execute the 7 agreement before you got the advice, that's what was -- was 8 abnormal? 9 A: Yes. 10 Q: That was not -- that was -- that was no in 11 accord with what you would normally do? 12 A: Well we -- we got the advice and we used 13 the advice to the extent we could. But given that this thing 14 had to happen before the first of the year, I guess a 15 decision was made that we'll go with what we have. 16 The normal course of events would be I would 17 have a letter from or a memo from Mr. Fecenko saying that the 18 document is reasonable from his point of view, or is 19 reasonable with these exceptions, and -- and it's our 20 decision to take them or not. 21 Q: Right, no, I understand, and -- and but, I 22 think it was meant -- I'm not here to -- I'm not trying to 23 criticize you, I just want to make sure we get the facts 24 straight. 25 A: Yes.

1 Q: That -- that this was -- this was not the 2 way you normally did it? 3 A: That's correct. 4 Q: And certainly, insofar -- and judging from 5 the -- from Mr. -- Mr. Fecenko's e-mail to you on the 5th of 6 January that we just looked at, he certainly didn't 7 appreciate that the -- the final agreement was going to get 8 executed without the benefit of his involvement, or his 9 advice; correct? 10 A: That's correct. 11 Q: He's still giving -- trying to give you 12 advice and offering to look at the actual document? 13 A: Yes. 14 15 (BRIEF PAUSE) 16 17 Q: I just have a couple of more questions I 18 want to ask you about the MFP transaction and then I'll be 19 concluded. 20 I take it that you'd agree that you would 21 have, although you don't specifically recall -- you don't 22 specifically recall any of your discussions with Mr. Fecenko, 23 but, I take it would be reasonable to expect that you would 24 have told him that this proposed master lease that you were 25 asking him to look at, first of all, followed the issuance of

1 an RFQ by the City, correct? 2 A: Yes. 3 Q: You would have told him that? 4 A: Yes. 5 Q: And that it would have followed the 6 submission by MFP of a response, you would have told him 7 that? 8 A: Yes. 9 Q: And that the response, MFP's response had 10 been carefully analyzed by the City's finance department, for 11 example, you would have told him that? 12 A: Yes. 13 Q: And that -- that MFP had been selected to 14 enter into a vendor of record arrangement with the City for 15 the provision of IT related lease financing as requested by 16 the City? 17 A: Yes. 18 Q: Because you understood this transaction to 19 be a vendor of record arrangement, correct? 20 A: That's correct. 21 Q: And that's what you told Mr. Fecenko it 22 was -- or you can't remember, I suppose, what you told him, 23 but it would be reasonable to assume that that's what you 24 told him, is that fair? 25 A: That's fair.

1 Q: I mean, if he says, that's what you told 2 him, you're not -- you wouldn't dispute that? 3 A: Right. 4 Q: And that you -- would it be fair to say 5 that you would expect that you would have indicated to Mr. 6 Fecenko that the RFQ and the MFP proposal contained business 7 terms that had been carefully reviewed by experts within the 8 City, is that fair? 9 A: I suppose so, yes. 10 Q: And would it be fair to expect that you 11 would have told him that having gone through this review and 12 selection process, that the City was satisfied with MFP's 13 response? 14 A: Yes. 15 Q: I mean you wouldn't be involving him in 16 the legal scrubbing of the agreement, would you, if the 17 business terms weren't acceptable to all the people who'd 18 reviewed them within the City, correct? 19 A: Correct. 20 Q: And is it fair to characterize the 21 services, and now I'm not just referring to MFP, but the 22 services the Mr. Fecenko provided as varying from time to 23 time, from reviewing a specific clause in an agreement or a 24 specific paragraph to reviewing a RFP or a proposal, is that 25 fair?

1 A: That's fair. 2 Q: I mean you used him -- there was a variety 3 of the degree to which you involved him and the Fasken's firm 4 in the business details of the transaction? 5 A: That's correct. 6 Q: But in the MFP case, all you were looking 7 for was legal advice on the legal terms and conditions of 8 that agreement, correct? 9 A: Yes. 10 MADAM COMMISSIONER: So, I have that right, 11 are you saying, Mr. Power, that in the MFP case, you were 12 just looking for legal advice on these legal terms and 13 conditions of the agreement, yes? 14 But that in other cases, where you had dealt 15 with Mr. Fecenko or the Fasken's firm, you had sometimes 16 asked them to review a request for proposal? 17 THE WITNESS: Yes. 18 MADAM COMMISSIONER: Okay. Thanks. 19 20 (BRIEF PAUSE) 21 22 CONTINUED BY MR. GLENN HAINEY: 23 Q: I want to just briefly review with you, 24 this issue that I think you've gone over already about this 25 paramountcy issue, you know what I'm talking about?

1 A: Yes. 2 Q: All right. 3 MADAM COMMISSIONER: I'm not sure I do, there 4 were paramountcy issues -- 5 MR. GLENN HAINEY: Well, okay. I'm going to 6 come to it. I thought that that's how -- 7 MADAM COMMISSIONER: Okay. 8 MR. GLENN HAINEY: -- it had been referred to 9 in the transcript. 10 MADAM COMMISSIONER: It could very well have 11 been. 12 MR. GLENN HAINEY: Okay. 13 MADAM COMMISSIONER: If it's only referred to 14 once, I might not remember. 15 MR. GLENN HAINEY: Okay. Well, let me see if 16 I can start at the beginning and get -- 17 MADAM COMMISSIONER: Okay. 18 MR. GLENN HAINEY: -- go through it. 19 MADAM COMMISSIONER: I've got my 20 constitutional hat on now. 21 MR. GLENN HAINEY: Yeah. 22 MADAM COMMISSIONER: What do you think about 23 that? 24 25 (BRIEF PAUSE)

1 MR. GLENN HAINEY: Yeah. These are commercial 2 lawyers taking our -- our litigation terms and putting them 3 in the context of a commercial deal. 4 5 (BRIEF PAUSE) 6 7 MADAM COMMISSIONER: Okay. 8 MR. GLENN HAINEY: Let's start at -- 9 MADAM COMMISSIONER: Oh, yes. I remember. 10 This is with respect to the RF -- 11 MR. GLENN HAINEY: The ordering of the pre -- 12 the ordering of the -- 13 MADAM COMMISSIONER: In effect -- 14 MR. GLENN HAINEY: -- various -- 15 MADAM COMMISSIONER: I remember exactly now. 16 MR. GLENN HAINEY: -- reference. I just -- 17 MADAM COMMISSIONER: Okay. 18 MR. GLENN HAINEY: I just want to clarify with 19 the Commissioner and with Mr. Power. 20 21 CONTINUED BY MR. GLENN HAINEY: 22 Q: And the starting point would be dra -- 23 would be Tab 1 of Volume I of your book of documents, Mr. 24 Power and sorry, it actually should probably be Tab 27. I 25 apologize. I think we should start at Tab 27 which is the --

1 what I understand is the -- and it's Doc -- Begdoc 11 -- 2 11126 and my understanding is that this is the document that 3 you asked Mr. Fecenko to review and you were asked about the 4 handwritten notations on the document and you didn't -- you 5 didn't recognize them. 6 Would it be reasonable if I were to suggest to 7 you that they're actually Mr. Fecenko's, would that -- would 8 that accord with your recollection or would you have a belief 9 one way or the other? 10 A: I wouldn't know one way or the either but 11 it could well be. 12 Q: Okay. Let's look at that document then at 13 Page -- the bo -- the page numbers are at the bottom right 14 corner. It's Page 7 of 12 under the entire agreement clause. 15 16 (BRIEF PAUSE) 17 18 Q: Now, you recall, I assume, discussing this 19 clause and this issue of the order of -- the paramountcy of 20 these documents with Mr. Fecenko, correct? 21 A: Yes. 22 Q: And you recall negotiating that issue with 23 MFP, I assume? 24 A: Yes. 25 Q: And if we look at Paragraph 26 and just

1 the underlined portion. It says: 2 "In the event there is a conflict or 3 inconsistency between a) the equipment 4 schedule; b) the program agreement; c) this 5 master lease; and d) Exhibits 1 and 2 to 6 this master lease, the following priority 7 shall prevail." 8 And then it lists: 9 "1) the equipment schedule; 2) the program 10 agreement; 3) this master lease; and 4) 11 Exhibits 1 and 2, which for clarity are 12 superceded by this master lease and program 13 agreement." 14 Now, that was the language proposed by MFP. 15 Is that correct? 16 A: Yes. 17 Q: All right. You then send that draft to 18 Mr. Fecenko and you ask him for his comments on the legal 19 terms and conditions, correct? 20 A: Yes. 21 Q: And let's go to Tab 1 then of the same 22 book. 23 24 (BRIEF PAUSE) 25

1 Q: And Tab 1 is a memorandum dated August 2 19th from Mr. Fecenko to you and he says in the first 3 paragraph: 4 "We've reviewed the drafts as you requested 5 and further to our discussion earlier today 6 would like to emphasize the following 7 concerns with respect to the master lease." 8 Now, my understanding is from your -- from the 9 exchange of questions and answers with Mr. Moore, that you 10 don't have any recollection about the discussion "earlier 11 today" referred to in that memo. Is that fair? 12 A: That's fair. 13 Q: If Mr. Fecenko's recollection is that it 14 was actually quite a lengthy discussion, you wouldn't 15 disagree with that, would you? 16 A: No. 17 Q: And if Mr. Fecenko's recollection is that 18 you -- that you and he discussed at some length this 19 paramountcy issue, if I can call it that, the ordering. The 20 issues th -- referred to in Item 3, the entire agreement 21 clause and the order of these documents, you wouldn't 22 disagree with that? 23 A: No. 24 Q: And he then, having discussed it with you, 25 sent you this memorandum, in which he said the following:

1 "The Master Lease and Program Agreement 2 should supercede Exhibits 1, or 2. Replace 3 the last sentence of the first paragraph 4 with the following," 5 And then he gave you the advise that's 6 recorded there, correct? 7 A: Yes. 8 Q: And then I take it, you went back to MFP 9 and conducted further negotiations with a view to -- to try 10 and incorporate what your legal counsel was telling you you 11 should try to incorporate in the final agreement, is that 12 fair? 13 A: Yes. 14 Q: And then, if you go then to Tab 102, of 15 the same book. 16 MADAM COMMISSIONER: Just before we leave 17 that, that was Begdoc 367. 18 MR. GLENN HAINEY: Oh sorry, yes. 102... 19 MADAM COMMISSIONER: You were doing -- 20 MR. GLENN HAINEY: ... which is -- 21 MADAM COMMISSIONER: You were doing so well 22 with those Begdoc numbers, Mr. Hainey. 23 MR. GLENN HAINEY: Well, I can -- 24 MADAM COMMISSIONER: I was going to use you as 25 an example, but --

1 MR. GLENN HAINEY: I've been well trained by 2 Ms. Lalji. She told me the Registrar would be very angry if 3 I didn't. And I -- we don't want to cross -- cross Madam 4 Registrar. 5 The Begdoc number of this one, at Tab 102, is 6 20598. 7 8 CONTINUED BY MR. GLENN HAINEY: 9 Q: And again, if you could look at the page 10 numbers at the bottom right, if you can look at Page 7 of 12. 11 Have you got that in front of you? 12 A: I do, yes. 13 Q: And then -- so -- you then -- Paragraph B, 14 of the entire agreement clause reads: 15 "In the event of any conflict or 16 inconsistency within the terms of this 17 master lease and the following documents, 18 the conflict or inconsistency shall be 19 resolved in accordance with the following 20 order of precedence. Equipment schedule 21 program agreement, master lease, Exhibit 2 22 and Exhibit 1." 23 And let me stop there. That is what Mr. 24 Fecenko recommended, that's the order he recommended in his 25 memo to you, correct?

1 A: Yes. 2 Q: But then it goes on, and says: 3 "Exhibits 1 and 2 were superceded by this 4 Master Lease and the Program Agreement." 5 And then there's a proviso. Which is exactly 6 what he recommended against, correct? 7 A: It appears to be, yes. 8 Q: Yes. And you'll agree with me that -- 9 that Mr. Fecenko never saw this final agreement until after 10 it had been executed with this language in it, correct? 11 A: I'm not sure if that's correct, but I -- I 12 can't say for certain. 13 Q: All right. Well, if he says he didn't, 14 you're not going to disagree with him, are you? 15 A: No, probably not. 16 Q: Now, another discussion that you had, I 17 suggest to you, with -- with Mr. Fecenko was about the fact 18 that the -- that this agreement would require the City legal 19 department stamp confirming it had been approved as the form, 20 correct? 21 A: Yes. 22 Q: That was a requirement that -- that City 23 Legal place a stamp on the document before it could be 24 executed? 25 A: That's correct.

1 Q: And that was something that -- and you 2 were familiar that that was a requirement? 3 A: Yes. 4 Q: You knew that was a requirement. And 5 you -- and the -- the requirement was -- this was -- this was 6 -- did you understand why that was a requirement or did you 7 just know that you had to have this stamped? 8 A: No, the contracting authorities for the 9 City were the Treasurer and the Clerk. And the Clerk's 10 office wouldn't -- would not sign contracts or legal 11 documents that did not have the City's Solicitor's stamp on 12 it? 13 Q: Right. 14 A: And for contracts that we had legal advice 15 from outside the City, we would ask the outside firm to write 16 us a letter commenting on the work they had done so we could 17 provide that to the City Solicitor's office, to assure them 18 that the contract or whatever document it was had been 19 reviewed. 20 And they could either review it further 21 themselves or use that letter to -- as an assurance for the 22 Clerk's department to contract. 23 Q: Right, what it meant to signify was that 24 the -- that the legal terms and conditions of a document had 25 been -- had been vetted by legal counsel, correct?

1 A: Right. 2 Q: The stamp had nothing -- that City legal 3 put on the document, had nothing to do with the -- whether it 4 was a good business deal or a bad business deal or -- it 5 wasn't meant to be an assessment of the business terms of the 6 transaction, correct? 7 A: I don't know for sure what the 8 expectations were of the City Clerk's office when they wanted 9 that -- 10 Q: Let me just -- let me just read to you 11 from -- you know Mr. Loreto? 12 A: Yes. 13 Q: And you dealt with Mr. Loreto, he was in 14 the City Solicitor's office? 15 A: Yes. 16 Q: You regarded him as an experienced City 17 solicitor? 18 A: Yes. 19 Q: He was the person who you dealt with in -- 20 in-house, so to speak, on the MFP transaction? 21 A: Yes. 22 Q: He was familiar with what Mr. Fecenko was 23 doing, in terms of the work he did -- legal work he did for 24 you on the MFP transaction? 25 A: Yes.

1 Q: You're familiar with the interviews that 2 were done by KPMG? 3 A: Yes. 4 Q: I just want to read to you, and this will 5 be in evidence, what Mr. Loreto had to say about the question 6 I just put to you. 7 And I just want to get your reaction -- I'm 8 not going to ask you, Mr. Loreto will be testifying, we can 9 ask him, but I just want to get your reaction to it, in terms 10 of your understanding. 11 MR. PATRICK MOORE: Just before -- 12 MADAM COMMISSIONER: Yes, Mr. Moore? 13 MR. PATRICK MOORE: Just before we do that, in 14 fairness to this witness and to Mr. Loreto, it might be well 15 if we revisit the use to which the KPMG statements are to be 16 made in these proceedings. 17 And it's my understanding that what we have 18 all agreed to is a little different than what direction we 19 seem to be now going in. 20 MADAM COMMISSIONER: Right. I'm not sure we 21 even need to go that far. Let's assume that Mr. Hainey had a 22 Will Say or a summary. We wouldn't be allowing any cross- 23 examination on that summary when we don't know -- well, the 24 agreement is, that there wouldn't be cross-examination on the 25 summary.

1 However, having said that, I see Mr. David 2 Moore's eager to say something -- 3 MR. DAVID MOORE: Yes -- 4 MR. GLENN HAINEY: Why don't I just withdraw 5 the question? 6 MADAM COMMISSIONER: Why don't I hear him -- 7 MR. DAVID MOORE: I want to say something. 8 There's no agreement to which I've been party to, restricting 9 the use of the KPMG statements. First off. End of story. 10 MADAM COMMISSIONER: If Mr. Hainey is 11 withdrawing the question we don't need to deal with this 12 right this second and I'll let you and Mr. Moore discuss it 13 at the break. 14 MR. GLENN HAINEY: I'll -- I don't want to get 15 embroiled in this, Commissioner. 16 MADAM COMMISSIONER: Okay. 17 MR. GLENN HAINEY: It wasn't that important a 18 question, I'll just withdraw it. 19 MADAM COMMISSIONER: All right. 20 MR. BRYAN MCPHADDEN: On a similar note, it 21 would appear that from the line of questioning that we will 22 see questions put to Mr. Fecenko, about what happened during 23 these various telephone conversations between him and Mr. 24 Power. 25 And I just want to make sure that we don't

1 have to have Mr. Power back because we have Mr. Fecenko 2 talking about pink Cadillacs. 3 And so to the extent that there might be pink 4 Cadillac assertions or comments made by Mr. Fecenko, I'd 5 invite and encourage Counsel to put those to Mr. Power at 6 this time, so that he can address those now as opposed to 7 later. 8 MR. GLENN HAINEY: I understand -- I 9 understand the sentiment, so I know exactly what I'm doing 10 and I'm attempting to do exactly that right now. 11 MADAM COMMISSIONER: Okay. 12 13 CONTINUED BY MR. GLENN HAINEY: 14 Q: The -- so I want to come back then to the 15 stamp from City Legal, just so we can close the loop on this 16 issue. The -- you and Mr. Fecenko agreed that he would 17 provide you with a letter for that purpose, correct? 18 A: Yes. 19 Q: And the -- the letter that he provided to 20 you for that purpose -- just give me a second here. 21 22 (BRIEF PAUSE) 23 24 Q: It's -- the Begdoc number, Commissioner, 25 is 11120.

1 MADAM COMMISSIONER: Is it Tab 24? 2 MR. GLENN HAINEY: I think it is. Just bear 3 with me for a moment. Yes. 4 5 (BRIEF PAUSE) 6 7 CONTINUED BY MR. GLENN HAINEY: 8 Q: Do you have that in front of you? 9 A: Yes. 10 Q: Okay. That's the letter that you got from 11 Mr. Fecenko in response to the discussion you had with him 12 about requiring a letter in order to obtain the stamp that 13 City legal had to put on the document. Right? 14 A: Yes. 15 Q: That was the sole purpose of getting this 16 letter from Mr. Fecenko, correct? 17 A: Yes. 18 Q: There was no other reason for it that you 19 -- and Mr. Loreto was aware that that's exactly what you were 20 doing, correct? 21 A: I would assume so. We'd done it before so 22 I would guess that Mr. Loreto knew what this was for. 23 Q: And what -- what you were getting from Mr. 24 Fecenko was his view of the legal terms and conditions 25 contained in the drafts that you had provided to him,

1 correct? 2 A: Yeah. 3 MADAM COMMISSIONER: I'm sorry. I -- could 4 you just repeat that last part? 5 6 CONTINUED BY MR. GLENN HAINEY: 7 Q: What you were getting was Mr. Fecenko's 8 view as to the legal terms and conditions contained in the 9 drafts -- the draft agreement that you provided him to 10 review, correct? 11 A: Yes. 12 Q: And you understood that -- when you got 13 the letter from him, I take it, that what he was telling you 14 was that in his view the legal terms and conditions contained 15 in those draft agreements fell within the realm of commercial 16 reasonableness, correct? 17 A: Yes. 18 Q: And that what that means was that the City 19 could then put -- City Legal could then put a stamp on the 20 document saying it had been approved as to form, correct? 21 A: Yes. 22 Q: And that form would be legal form -- the 23 legal form of the terms and conditions, correct? 24 A: Yes. 25 Q: Because the actual business deal was --

1 just dealing with City Legal. The business deal was not part 2 of City Legal's responsibility, was it? 3 A: Not usually. 4 Q: Well, not in this case, was it? 5 A: Not in this case. 6 Q: And the business deal wasn't part of Mr. 7 Fecenko's responsibility in this case either, was it? 8 A: Correct. 9 MADAM COMMISSIONER: Now, there's nothing in 10 the letter, Mr. Hainey, that indicates that Mr. Fecenko was 11 looking at a draft. 12 MR. GLENN HAINEY: Well, it's in the re: line. 13 It says -- 14 MADAM COMMISSIONER: Okay. Collectively, the 15 drafts. 16 MR. GLENN HAINEY: Yeah. 17 MADAM COMMISSIONER: Okay, thank you. 18 19 CONTINUED BY MR. GLENN HAINEY: 20 Q: And all he had, just so the Commissioner 21 is clear. All Mr. Fecenko ever had that he provided you 22 advice on were the drafts, correct? 23 A: Correct. 24 Q: And we've seen how -- already how the 25 final executed document differed from the draft, correct?

1 A: Yes. 2 Q: The entire agreement 3 A: Yes. 4 Q: The entire agreement clause we looked at 5 was different than what Mr. Fecenko looked at and gave you an 6 opinion on, correct? 7 A: Yes. 8 MR. GORDON CAPERN: Commissioner, if I might 9 just to clarify this point for the record now, so I don't 10 have to come back to it during my examination, in Tab 1, I 11 believe, it's Tab 1, Volume I, is contained the memo from Mr. 12 Fecenko which defines the drafts. 13 Again there it refers -- using the exact same 14 re: line that he uses in his letter. And we'll get into this 15 with Mr. Fecenko, as well. 16 But our understanding is consistent with Mr. 17 Hainey's, that these drafts that are referred to are the ones 18 that are the subject of the mark ups that have been in front 19 of you today. 20 MADAM COMMISSIONER: Okay. 21 MR. DAVID MOORE: I raise this, and it's 22 probably -- my recollection is there was an e-mail that was 23 received just before the delivery of this August 20th letter. 24 Now, I don't know whether it really affects my 25 client, but since we're on the topic, I don't know where it

1 is offhand in the documents -- 2 MR. GORDON CAPERN: I do -- 3 MR. DAVID MOORE: -- but this may be more 4 efficient, if it adds anything to this line of inquiry, it 5 might save some time for Mr. Capern, I don't know. 6 But I do recall, there is an e-mail in which 7 Mr. Fecenko indicated that he would be sending this August 8 20th letter. 9 MR. GORDON CAPERN: That's found, 10 Commissioner, at Tab 65 of Volume IV. 11 12 (BRIEF PAUSE) 13 14 MR. GORDON CAPERN: I'm sorry, Commissioner, 15 Tab 66, I believe, of Volume IV. Yes, it's Tab 66 of Volume 16 IV. 17 MADAM COMMISSIONER: And what is it you wanted 18 me to do with that? 19 MR. GORDON CAPERN: It's Mr. Moore's point 20 that it's an e-mail from, Mr. Fecenko to Mr. Power, 21 confirming that he will be delivering the letter that's the 22 subject of Mr. Hainey's question. 23 MADAM COMMISSIONER: Okay. Right. Okay. 24 MR. GORDON CAPERN: And it was something I did 25 intend to take him to. So, it saves time.

1 CONTINUED BY MR. GLENN HAINEY: 2 Q: Yes, he -- I don't know if you'll remember 3 it or not, but, Mr. Fecenko e-mailed you to tell you he was 4 going to send you the letter. Do you remember that? 5 A: No. 6 Q: No. 7 8 (BRIEF PAUSE) 9 10 Q: And the -- just to go back to this vendor 11 of record concept, Mr. Power, I take it you'll agree with me 12 that the documentation that you asked Mr. Fecenko to review, 13 and that he gave you legal advice on, did not affect the 14 leasing transaction, did it? 15 A: I'm not sure I understand your question. 16 Q: All right. You understood that in order 17 to actually effect -- have a lease transaction, you'd have to 18 enter into an equipment schedule and finalize the program 19 agreement, correct? 20 A: Correct. 21 Q: And that -- so that at the point in time, 22 that you were asking Mr. Fecenko to give you the legal advice 23 you asked him for, that actual documentation that he reviewed 24 didn't create a leasing transaction, did it? 25 A: No.

1 Q: And, in fact, given your expectation that 2 the parties, that is the City and MFP, would have had to 3 enter into an equipment schedule and finalize the program 4 agreement, that equipment schedule was going to be paramount 5 over all the other terms of the agreement, correct? 6 A: Yes. 7 Q: And you would have, I assume, involved 8 either the City legal department or outside legal counsel in 9 a review of those subsequent transactions that would have 10 been required in order to actually create a lease 11 transaction, correct? 12 A: Yes. 13 Q: And it would be reasonable, based on your 14 experience, for Mr. Fecenko to have that view as well, 15 correct? 16 A: Yes. 17 MR. GLENN HAINEY: Thank you very much, Mr. 18 Power. Those are my questions. 19 Thank you, Commissioner. I guess I just made 20 it under the wire for an hour and a half. 21 MR. BRYAN MCPHADDEN: I just want to make sure 22 you've put to him all the questions he has about those 23 conversations? 24 MADAM COMMISSIONER: Well, he said, Mr. 25 McPhadden, Mr. Hainey says that he has. That -- and --

1 MR. GLENN HAINEY: Well, I've put to him, I 2 mean, he has no recollection. I don't know what -- I don't 3 know what My Friend says I need to maybe be putting to him. 4 MADAM COMMISSIONER: Well, I suspect he's 5 wanting you to put more of the details to him that might have 6 the effect of triggering a recollection in Mr. Power's 7 memory. 8 MR. BRYAN MCPHADDEN: That's exactly right, 9 and what we expect to be hearing from Mr. Fecenko. 10 MR. GLENN HAINEY: Well, I don't -- I don't 11 think there's any surprises to what you -- I think I've put 12 everything to him -- 13 MR. BRYAN MCPHADDEN: Okay. 14 MR. GLENN HAINEY: -- I mean, if you want me - 15 - I can -- I'm not sure what else I can put to him. 16 MADAM COMMISSIONER: I take it what Mr. -- 17 what Mr. McPhadden is essentially saying is that, as you 18 said, Mr. Power was dealing with thousands of -- of documents 19 at that particular time, a lot of it being in a rushed 20 situation, and he has very little recollection of details 21 conversation. 22 He has recollection of general things 23 happening, that he consulted Mr. Fecenko, that there had been 24 some discussions, the Mr. Fecenko responded, et cetera, but 25 in terms of the actual details of the conversation, he

1 doesn't have a recollection now of those details. 2 Now, I don't know, it might be that Mr. Power 3 might say, you could tell me as much as you want about what 4 Mr. Fecenko is going to say, I can tell you I'm not going to 5 remember anyway because I don't remember the details. 6 It might very well be that, but I think what 7 Mr. McPhadden is saying is that, if we were to know now what 8 it is that Mr. Fecenko is likely going to be saying when he's 9 here, that, at least, puts Mr. Power in the situation of 10 having his memory triggered and puts him in the position of 11 being able to respond now. 12 MR. GORDON CAPERN: Commissioner, I have one 13 suggestion on this, if I might? 14 MADAM COMMISSIONER: Hmm hmm. 15 MR. GORDON CAPERN: To be of assistance. 16 We've been here for an hour and a half this morning. I 17 understand that between Commission Counsel and Mr. Hainey, 18 they've been working on doing an affidavit from Mr. Fecenko, 19 which has -- is, I understand, close to final form. 20 It may be useful to take the break now, invite 21 Mr. Hainey to review the affidavit, at least in its draft 22 form, to see if there are matters raised in that that should 23 be put to Mr. Power this morning while I set up to start my 24 examination. 25 MADAM COMMISSIONER: Okay.

1 MR. GORDON CAPERN: If that's of any 2 assistance. 3 MADAM COMMISSIONER: Okay -- 4 MR. GLENN HAINEY: Here's what I'll do, I'll 5 go even further, why don't -- if this is a convenient time 6 for you, take a break. I mean, we -- we do have a draft of 7 an affidavit that we've -- 8 MADAM COMMISSIONER: Right. 9 MR. GLENN HAINEY: -- been working Inquiry 10 Counsel, which hopefully will be finalized soon. 11 I'm happy, it's draft, not sworn. It's -- 12 MADAM COMMISSIONER: Right. 13 MR. GLENN HAINEY: -- always subject to 14 further revision, although I doubt that they'd be very -- 15 anything substantive. 16 I'm happy to show it to Mr. McPhadden at the 17 break, and let him look at it. 18 MADAM COMMISSIONER: Okay. 19 MR. GLENN HAINEY: And if he thinks there's -- 20 there's issues that he wants to put -- wants me to put to -- 21 to Power, given the evidence he's already given, that's fine 22 with me. 23 MR. BRYAN MCPHADDEN: Well, I think that 24 should be his responsibility to decide what he wants to put 25 to this witness.

1 MR. GLENN HAINEY: Well, I -- 2 MADAM COMMISSIONER: Well -- 3 MR. GLENN HAINEY: -- I think that -- I 4 thought I made that decision. I'm now, I mean, I'm -- I'm 5 having a number of Counsel, sort of, telling me how I'm 6 supposed to cross-examine this witness. I -- 7 MADAM COMMISSIONER: Here's what I'm going to 8 do. It's 10:30, we've been here for an hour and a half. 9 We're going to take a break in any event. 10 We'll come back at 10 to 11:00. Whatever 11 counsel can do to cooperate, to facilitate the expeditious 12 moving of this Inquiry is always helpful. 13 And I will leave it to you gentleman to decide 14 how -- and you, how you're going to -- how you're going to 15 organize this. All right? 16 MR. GLENN HAINEY: Thank you. 17 MADAM COMMISSIONER: And if you're back at 10 18 to 11:00, Mr. Hainey, we'll -- 19 MR. GLENN HAINEY: Thank you. 20 MADAM COMMISSIONER: -- see you, and if you're 21 not, I understand you have to leave. 22 MR. GLENN HAINEY: No, no, I'll be here. 23 MADAM COMMISSIONER: Oh, you'll be here. 24 Okay. 25 THE REGISTRAR: Order. The Inquiry will

1 recess until ten (10) to 11:00 2 3 --- Upon recessing at 10:32 a.m. 4 5 --- Upon resuming at 10:50 a.m. 6 7 THE REGISTRAR: The Inquiry will resume. 8 Please be seated. 9 MADAM COMMISSIONER: Mr. Hainey, you're still 10 on your feet? 11 MR. GLENN HAINEY: I am, Commissioner, and 12 I've -- what I propose to do, I want to be complete fair to 13 this witness and to the Inquiry and so what I propose to do 14 is simply read tho -- I guess I should say what I anticipate 15 Mr. Fecenko's evidence will be because the affidavit is not 16 as yet -- 17 MADAM COMMISSIONER: Right. 18 MR. GLENN HAINEY: -- sworn but as I told you, 19 it's in draft. 20 MADAM COMMISSIONER: Okay. 21 MR. GLENN HAINEY: Is just read to Mr. Power 22 what it is I expect will be in the affidavit and let him know 23 that's -- that's what Mr. Fecenko, I expect, will say. 24 MADAM COMMISSIONER: Okay. 25 MR. GLENN HAINEY: And it's not -- I'm

1 obviously not going to deal with the entire affidavit, only 2 those portions that relate to conversations -- 3 MADAM COMMISSIONER: Right. 4 MR. GLENN HAINEY: -- with Mr. Power. 5 6 CONTINUED BY MR. GLENN HAINEY: 7 Q: So -- and I think -- and to the extent I'm 8 going over ground I've already covered with you, Mr. Power, I 9 apologize but I want to make sure I let -- told you 10 everything I anticipate Mr. Fecenko is going to say about the 11 discussions he had with you. 12 And so I anticipate he's going to say that you 13 and he discussed at some point the fact that the 14 documentation that he was reviewing would require the City 15 Legal stamp confirming that it had been approved as a form 16 and that he suggested that for that purpose he could provide 17 a letter stating that the legal terms and conditions that 18 he'd reviewed were commercially reasonable and that you said 19 you thought that would be sufficient. 20 I take it that's in accord with your 21 recollection? 22 A: Yes. 23 Q: And then -- 24 MADAM COMMISSIONER: I didn't hear your 25 answer?

1 THE WITNESS: Yes. 2 MADAM COMMISSIONER: Okay. 3 4 CONTINUED BY MR. GLENN HAINEY: 5 Q: And then I anticipate he'll say that on 6 August the 19th -- now, this is the -- this is one of the 7 conversations that you've told us you don't recall the 8 specifics of. It's one of many conversations but this is 9 what he -- what I anticipate he's going to say: 10 "On August 19th I had a lengthy telephone 11 conversation with Mr. Power with respect to 12 the terms and conditions of the draft 13 master lease and program agreement number 14 PA1. I made certain notations on my copy 15 of the draft documentation to flag matters 16 for discussion with Mr. Power." 17 And I guess I'll stop there. I think I asked 18 you earlier, you can't recall whether it was a lengthy 19 conversation or not but you think there probably was a 20 conversation, right? 21 A: Right. 22 Q: "Among my concerns was the need to 23 incorporate into the master lease the terms 24 of the RFQ and the proposal. I explained 25 to Mr. Power that it was normal for the

1 proposal to be paramount to the RFQ as it 2 is the response to the RFQ -- as it is the 3 response to the RFQ and confirm with Mr. 4 Power that that was the basis upon which 5 the City was to proceed." 6 I take it you don't recall that discussion, 7 from what you said earlier? 8 A: Right. 9 Q: But no reason to believe it didn't happen, 10 correct? 11 A: Correct. 12 Q: "Mr. Power was comfortable with that. We 13 discussed the fact that the master 14 agreement would be paramount over the RFQ 15 and the proposal and that this was a 16 concern if there was any term of the 17 agreement which was inconsistent or incom 18 -- in conflict with the RFQ or proposal and 19 of disadvantage to the City. 20 I asked him if that was the case and he 21 said no." 22 And I take it you don't recall specifically 23 that discussion but no reason to believe it didn't happen, 24 correct? 25 A: Correct.

1 Q: "I further questioned him on this point and 2 referred him to Section 24 of the master 3 agreement that had an interest rate of 24 4 percent for overdue accounts. I asked if 5 either the RFQ or the proposal dealt with 6 this financial point and offered a more 7 advantageous rate. The answer was 'That's 8 fine'" 9 And I take it you don't recall the specifics 10 of that conversation but no reason to believe it didn't 11 happen? 12 A: Right. 13 Q: "Other than the equipment schedules, I 14 stated that it would be expected that the 15 program agreement number PA1 would be 16 paramount over the terms of the agreement 17 including the RFQ and the proposal. We 18 discussed whether the program agreement was 19 inconsistent with the RFQ or the proposal 20 generally." 21 Again, you don't recall, I take it, the 22 specifics but no reason to believe it didn't happen? 23 A: Correct. 24 Q: "I was also specific about whether 25 Sections 2, 3 and 4 of the program

1 agreement were inconsistent with the RFQ or 2 the proposal. Mr. Power did not raise 3 objections to those sections. Sections 2 4 and 3 are consistent with a non-exclusive 5 vendor of record arrangement." 6 And again I take it you don't recall 7 specifically discussion that but no reason to believe it 8 didn't happen? 9 A: Correct. 10 Q: "We agreed that the equipment schedule 11 would be the paramount document as it would 12 be specific to a specific deal under the 13 vendor of record arrangement. On this 14 basis, the order of the paramountcy 15 provision was set and was agreeable to Mr. 16 Power. This order of paramountcy was then 17 set out in my memorandum to Mr. Power dated 18 August 19, 1999." 19 And that's Begdoc number -- Begnock -- 20 MADAM COMMISSIONER: Begdoc. 21 MR. GLENN HAINEY: Begdoc number. 22 MADAM COMMISSIONER: It means Beginning 23 Document. 24 MR. GLENN HAINEY: Oh, okay. 2675. 25

1 CONTINUED BY MR. GLENN HAINEY: 2 Q: "I was advised by Mr. Power that I was to 3 review the draft documents he supplied and 4 given a very short time in which to do so. 5 Mr. Power e-mailed me --" 6 And that is something I think you do remember? 7 A: Yes. 8 Q: "Mr. Power e-mailed me at 12:07 on August 9 19th --" 10 And that's Begdoc 1117. 11 "-- asking for my suggested changes that 12 afternoon. He express -- expressed hope to 13 have the draft documents revised and 14 executed by the following day. I 15 understood from Mr. Power that he had 16 reviewed all the relevant documents and had 17 already engaged in negotiations with MFP." 18 And although you don't recall the specifics of 19 the discussion, that's in accord with what you would expect 20 you'd probably discuss, is that fair? 21 A: That's fair. 22 Q: He says: 23 "In order to understand the deal, I asked 24 Mr. Power for a copy of the RFQ and the MFP 25 proposal. Mr. Power told me that those

1 documents only contain business terms, that 2 they'd been reviewed by the finance people 3 who were expert in reviewing the business 4 terms and that they were satisfied with the 5 MFP response and that the review of those 6 documents was outside the scope of what Mr. 7 Power would need to review." 8 And although you don't -- that's a discussion 9 you don't recall the specifics of, no reason to believe that 10 didn't happen, correct? 11 A: Right. 12 Q: "These instructions were consistent with 13 the retainer." 14 And that's fair, too, correct? 15 A: Yes. 16 Q: "And depending on Mr. Power's 17 instructions, our provision of legal 18 services under the retainer would vary from 19 reviewing a specific clause or paragraph in 20 an IT agreement to reviewing an agreement 21 in a related RFP proposal." 22 And I think we've already been over that and 23 you agree with that? 24 A: Yes. 25 MR. GLENN HAINEY: And that, Commissioner,

1 would be the extent of the detailed evidence, with which I'm 2 familiar that I expect will be in Mr. Fecenko's affidavit, 3 relating to discussions with the witness. 4 MADAM COMMISSIONER: Thank you. 5 MR. GLENN HAINEY: And that completes my 6 cross-examination. 7 Thank you very much, Mr. Power, and thank you 8 Commissioner. 9 MADAM COMMISSIONER: All right. 10 Mr. Capern, you're back. 11 MR. GORDON CAPERN: I am back, Commissioner, 12 thank you. 13 14 (BRIEF PAUSE) 15 16 CONTINUED CROSS-EXAMINATION BY MR. GORDON CAPERN: 17 Q: We got started yesterday, Mr. Power, at 18 sort of the end of where I wanted to go in the cross- 19 examination. 20 And I guess to give us both a sense of 21 direction about the purpose of my cross-examination, it's 22 going to be predominately to further unpack and if I can use 23 the expression, unpeel the onion, about the internal workings 24 of the City and who was, on an individual basis, responsible 25 for the series of decisions which I think are at the root of

1 the Inquiry. 2 And I highlight for you, the decision to lease 3 at all, the decision to first consider vendors of record. 4 And then next the decision to appoint what 5 appears to be an exclusive vendor of record, which I regard 6 as being different concepts. 7 I also intend to review the use of a quotation 8 as opposed to a proposal request, here which has been touched 9 on by other Counsel and the analysis that's been done at 10 Finance and what underlies -- what was underlying that 11 analysis that was done at Finance. 12 And what I'm hopeful that we'll be able to do, 13 is get some clarity about individual responsibility, so that 14 we can all, as counsel at the Inquiry, refine our questioning 15 for witnesses that are coming down the pipe, if that gives 16 you a sense of where I would like to go. 17 The first area is the decision to lease. And 18 I'm referring back to your March 6th transcript, which I 19 recognize is now a couple of weeks back. 20 And you were asked a question by Mr. Moore, at 21 page 53 of that transcript, beginning at line 25, the very 22 end. We're going over to page 54. 23 And Mr. Moore asked you, this is Mr. Pat 24 Moore: 25 "And can you tell me about the process

1 leading toward that decision? Do you know 2 who at the City was involved in 3 deliberations leading to that decision?" 4 And your answer was: 5 "I can't tell you who. My recollection is 6 that it was the outcome of discussions held 7 between the IT Department and the Finance 8 Department." 9 And answer: 10 "Finance hardware and software going 11 forward." 12 Question: 13 "Right and did the Y2K project management 14 office participate in those discussions to 15 your knowledge." 16 Answer: 17 "Not to my knowledge." 18 And you then go on to say, and in fairness to 19 you, say, from that -- and Mr. Moore's next question is: 20 "And from that I take that, that you 21 personally had no involvement in 22 discussions leading to that decision?" 23 Answer: 24 "Not that I can recall, it would be 25 considered decision making conversations,

1 no." 2 And what I'd like to do with that frame work, 3 Mr. Power, is get some clarity about decisions, because 4 Departments don't make decisions obviously, people do. And I 5 want to understand the people that were involved in that 6 process. 7 And I'm going to start by asking you about Mr. 8 Andrew, because there's a series of questions that I put to 9 MFP witnesses, and that I will also -- or one (1) of my 10 partners will be putting to Mr. Andrew, that this -- about 11 the topic of why people who run IT Departments like Mr. 12 Andrew does, are attracted to leasing, as a vehicle. 13 And what I suggested to the -- to the -- some 14 of the people at MFP that I examined, in particular Ms. 15 Payne, was that Directors of IT confront particular struggles 16 when having to deal with bodies like City Council; do you 17 agree with that? 18 And let me give you a specific example of what 19 I'm talking about, so we can come straight to the point. 20 In a purchase environment, for example, where 21 a -- a Director of IT is required to keep a -- an up to date 22 computer platform for the end users, the -- if you were in a 23 purchase environment, the result is that frequently you have 24 to go to Council for approval on acquisitions; is that right? 25 A: That's sometimes the case, yes.

1 Q: Right. And I'm speaking particularly in 2 the Municipal environment, and in particular at the City of 3 Toronto, that's your understanding? 4 A: Yes. 5 Q: And I'm right, sir, that the -- that -- 6 that doing so, can -- can require peop